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Notices of coding – latest news

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1st Mar 2010
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HMRC will shortly commence issuing notices of coding to employers on forms P9. As a result of the issues encountered in January and Februray, forms P9 will not be issued at this point for a number of employees and pensioners where HMRC has already identified the presence of information on file which could lead to an incorrect code being issued. So employers may not receive as many notices of coding as they are expecting at first, because notices will not be issued to employers where HMRC expects more work is needed to establish the correct code. The instruction to employers is to continue to use the current tax code in 2010/11 if no revised code has been issued.

Work continues to identify and correct codes issued to individual taxpayers before the start of the tax year, with those most vulnerable to an overpayment being dealt with first.

There is also now an extensive page of explanations of why codes may be incorrect and what steps HMRC is taking to resolve the issues.
 

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By jonbryce
01st Mar 2010 12:51

Job Seeker's Allowance?

Have they done anything about this being coded out yet?  I can't think of any valid reason why Job Seeker's Allowance should appear on a coding notice.

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Rebecca Benneyworth profile image
By Rebecca Benneyworth
01st Mar 2010 17:21

I can see why

mid way through the tax year JSA might be coded out as the code needs to be reduced to reflect the JSA paid earlier in the year. But you seem to be referring to a code for the new tax year? Is this a specific underpayment from the current year being carried into next year's code or a [***] up in that current year JSA is rolled into next year's codes for all recipients?

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By jonbryce
01st Mar 2010 19:33

JSA in coding notices

This is for 2010/11 tax codes.  We have some clients who claimed benefits in 2008/09 before getting their current job.  HMRC then codes out the same amount of benefit in the current year with the comment "you have told us there might be some gaps in your employment".

If someone had claimed Job Seeker's Allowance earlier this year, they would either have a P45 from the Benefits Agency which shows the benefit as part of their earnings to date, which goes as "income from previous employments" in their new employer's payroll, or they go on a Month 1 code, which ensures they don't get the benefit of their allowances for the period when they were unemployed.  HMRC would then send them a coding notice with the benefit included in the pay and tax from previous employments, and it would get taxed that way.  There is no need, as far as I can see, to adjust the tax code itself.

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Rebecca Benneyworth profile image
By Rebecca Benneyworth
02nd Mar 2010 09:09

Jon, I agree

I think this issue is worth taking up with Working Together if it is a national issue as it seems nonsensical. If you are a member of local WT or have contact details for your local group I think raising it would be a good idea - or your professional body may have a protocol for dealing with issues like this (ICAEW Tax Faculty certainly does, but not aware of others as this is the only group I am a member of).

Failing that, if you would like to start a coding issues thread in our new Working Together e-Group (on the discussion groups page) we can see what other issues are coming forward in relation to notices of coding systems - I have one I will put into the ring. Thanks for raising this as I was not aware of the issue.

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By aidan.sergent
03rd Mar 2010 12:24

HMRC approach to PAYE code issue

I would be interested in other practitioners experiences in dealing with the PAYE notice issues for 2010/11. Our experience ranges from very helpful to downright obstructive. In the same office we have dealt with a jobsworth whose reaction to being told that our client had only one source of employment for over four years, was to say that nothing could be done to move the personal allowance from the prior employment to the current one, until a P45 had been received, and would not state the previous employer details to us although we are the registered agent, and a colleague who when we phoned later with the previous employer's name was quite happy to amend the record!

What guidance has been issued within HMRC to deal with the "apparent" multiple employment issue? This seems to arise where P45's for whatever reason have not been processed on the employer record, but it is hardly the former employees job to put it right!  

Surely the common sense approach (oh dear, I'm hallucinating again) is for any allowances to be given against the "employment of choice" of the taxpayer, with the other employment(s) being coded BR or D0 until the employer issues can be sorted out? 

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By Shirley Martin
08th Mar 2010 19:27

5 more items on the list of known NPS issues

The latest list of known NPS issues, updated sometime in the last few days, has 5 new items on it.

They are:

Works number truncation;

Employment and support allowance;

Gift Aid not included in 2010-11 tax code;

Married Allowance transferred to Wife (MAW) not included; and

Potential underpayments in code for Self Assessment cases.

The list is on http://www.hmrc.gov.uk/agents/nps.htm

Kind regards

Shirley

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By User deleted
16th Apr 2010 10:55

Nitices of coding

Both my husband and I are pensioners with small additional pensions as well as the state pension. We also still have a small practice which brings in additional income. We have both received ridiculous coding notices in the last two weeks. Mine arrived this morning informing me that I would be earning over £112,950 and that the pension provider must use K305!  My husband was also told his earnings would be over £112,850!  We wish they were!

How can the IR keep churning out such rubbish. The line for reporting incorrect codes must be running hot, I tried to get through but gave it up as a bad jub. All operators are busy!!!!!  What excuse will they have for all the upset they will causing a lot of people?

 

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